From float to efficiency: MSC’s digital solution for effective expenditure management

• Dec 28, 2023
• 1 min

MSC has been working in India to reform the public finance landscape through digital principles and tools, such as single source of truth, just-in-time funding, and smart payments. These projects would improve public expenditure’s efficiency and remove barriers to private sector participation.

Governments at all levels struggle to make public expenditure more effective and efficient. Float or an unused surplus of public funds in various implementing agencies’ bank accounts and delays in government payments to private vendors are key sources of inefficiencies in expenditure management. MSC has been working with Odisha’s finance department and a line department to pilot the solution. We used digital principles and tools to develop the solution. These include a single source of truth, just-in-time funding, and smart payments.

MSC ran detailed diagnostics of the programs managed by various line departments to identify a suitable use case to deploy the solution. We did a process analysis to identify payment gaps once we identified the program. We developed detailed “should-be” maps for the reengineered process. MSC designed the solution as the last step.

We expect these projects to emerge as helpful solution templates across India and the developing world for public finance reforms. Government agencies’ improved budget execution capabilities would reduce fiscal deficits due to float reduction. It would also remove barriers to private sector participation caused by payment delays.

The Bill & Melinda Gates Foundation commissioned this project.